UK-based bank Barclays ( BCS) is another financial sector giant that's in a channel right now, just not with the same kind of upward mobility that U.S.-based financials have been enjoying. Instead, Barclays has been trading sideways in a price channel called a rectangle.
Rectangle patterns get their name because they basically "box-in" shares in between a horizontal resistance level to the upside and a horizontal support level that acts as a sort of price floor. Unlike the other patterns today, rectangles don't have quite as much directional bias. In other words, the ultimate direction of the trade is determined by the direction that BCS breaks out of its channel in.With well-defined support below and resistance above, there are large pockets of supply and demand for Barclays' shares; traders will want to see one of those imbalances absorbed by the opposing side before taking a trade on shares of this stock. Buy on a move above $20; otherwise, sell a drop below $16.75.
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